4) Copy to C:\Program Files\Microsoft SDKs\WindowsPhone\v7.0\Emulation\Images, replacing the old file (Might want to backup the old file)

5) Run the emulator.

*Hint: If you don't want to use the IDE to run the emulator, make a shortcut to:
"C:\Program Files\Microsoft XDE\1.0\XDE.exe" Files\Microsoft XDE\1.0\xde.exe C:\Program Files\Microsoft SDKs\WindowsPhone\v7.0\Emulation\Images\WM70C1.bin